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Gold Near Steady in Choppy Trading; ECB Rate Cut Quickly Digested

(Kitco News) - Gold prices are trading near unchanged in early U.S. trading Thursday. The yellow metal showed no significant movement in the aftermath of the interest rate cut from the European Central Bank. The next two days will provide a plethora of economic data for the markets to absorb. December Comex gold was last down $1.20 at $1,269.20 an ounce. Spot gold was last quoted down $1.80 at $1,268.00. December Comex silver last traded up $0.031 at $19.22 an ounce.

The ECB lowered it interest rates at Thursday’s meeting, to very near zero percent. The market place reckoned the ECB was on the verge of announcing fresh monetary stimulus. There was uncertainty on the precise timing of any such move. ECB president Mario Draghi’s press conference will be closely monitored by the market place, as usual.

The U.S. jobs report on Friday will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August. Recent improving U.S. economic data suggests the Federal Reserve will continue to wind down its quantitative easing of monetary policy by the end of this year, and will likely begin to raise interest rates sometime in 2015.

The Bank of England also holds its monthly monetary policy meeting Thursday.

There is a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the ADP national employment report, the Challenger job cuts report, revised productivity and costs, the international trade report, the U.S. services PMI, the ICSC chain store sales report, the DOE liquid energy stocks report, and the ISM non-manufacturing report.

The ADP jobs report showed a rise of 204,000 in August, which was slightly less than the market place expected, but had little impact on market prices.

On the geopolitical front there have been no major, markets-moving developments this week. The Russia-Ukraine stand-off continues to simmer, with a cease-fire maybe in place, but maybe not. The U.S. and U.K. continue to ratchet up their defensive postures against the ISIS terrorists in the Middle East.

Wyckoff’s Daily Risk Rating: 6.0 (The market place this week is less focused on the tensions between Russia and Ukraine, and on other world hot spots. But I look for that trader and investor antipathy to change, and sooner rather than later.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,271.00 versus the previous P.M. fixing of $1,265.50.

Technically, gold bears have the overall near-term technical advantage. A seven-week-old downtrend is firmly in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of $1,276.20 and then at $1,280.00. First support is seen at this week’s low of $1,261.90 and then at $1,250.00.

December silver futures bears have the firm near-term technical advantage as prices hit a nearly three-month low on Tuesday. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at $19.355 and then at this week’s high of $19.565. Next support is seen at this week’s low of $19.11 and then at $19.00.

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